What is typically included in claims expenses for an insurance company?

Claims expenses for an insurance company typically encompass costs associated directly with processing and managing claims made by policyholders. Legal fees related to disputes fall under this category because they are incurred when an insurer must defend against a lawsuit or negotiate settlements arising from claims. These expenses are necessary for the company to fulfill its obligations under its policies, ensuring that claims are handled in compliance with legal and contractual standards.

The other options, while related to the insurance sector, do not pertain to claims expenses in the same direct way. The agent's commission is a cost associated with the sale of insurance policies, marketing costs relate to promoting products and acquiring new policyholders, and underwriting expenses pertain to the assessment and evaluation of risk when issuing policies. Each of these functions is crucial to an insurance company's operations but is categorized differently than the costs directly tied to claims handling.